Sources: 'Tex' takes Yanks' 8-year deal

The New York Yankees swooped in Tuesday and hooked prized free agent Mark Teixeira, reaching agreement with the first baseman on an eight-year contract worth $180 million, three sources involved in the negotiations said.

The agreement, which is subject to a physical, includes a signing bonus of about $5 million paid out over the first three years of the contract, no opt-out clause and a complete no-trade provision, the sources said.

With the Red Sox, Angels, Nationals and Orioles making well-documented runs at signing Teixeira, the Yankees made an offer weeks ago, but then withdrew it; their intention all along was to make an offer, which they did formally on Tuesday, if it fell within parameters acceptable to the organization.

The contract will pay Teixeira, who made it clear he wanted to make a decision on where to play next season and beyond by Christmas, an average of $22.5 million per season. Boston's offer to Teixeira was for $168 million over eight years, an average of $21 million a year.

"They have the revenue sources that most don't have, and they have a lot of money coming off the books this season," Angels general manager Tony Reagins, who had hoped to retain Teixeira, told The Associated Press on Tuesday night. "So if they're willing and able to spend, I'm pretty sure they've made some good investments."

The Yankees indeed shed $88.5 million from their books (included in that total -- $23.4 million on Jason Giambi, $16 million on Bobby Abreu, and $11 million to both Mike Mussina and Carl Pavano), and even with the Teixeira contract, they expect their payroll to fall below $200 million. New York has committed $423.5 million in salary in the past month, with $161 million going to left-handed pitcher CC Sabathia ($23 million per over seven years) and $82.5 million to right-hander A.J. Burnett ($18.5 million per over five) last week alone.

"At the rate the Yankees are going, I'm not sure anyone can compete with them," Milwaukee Brewers owner Mark Attanasio told Bloomberg News in an e-mail. "Frankly, the sport might need a salary cap."

The deal for Teixeira also virtually eliminates any chance that free-agent outfielder Manny Ramirez has a landing place with the Yankees. New York does have money left to add another starting pitcher, most likely free agent left-hander Andy Pettitte at $10 million if he agrees to terms soon. Pettitte made $16 million with the Yankees last season.

Teixeira's salary gives the Yankees, who are preparing to move into their $1.3 billion new ballpark in April, the four highest-paid players in Major League Baseball: himself, Sabathia, third baseman Alex Rodriguez (10 years, $275 million) and shortstop Derek Jeter (10 years, $189 million).

"From the moment we arrived in Boston in late 2001, we saw it
as a monumental challenge," team owner John Henry said in an e-mail to
The Associated Press. "We sought to reduce the financial gap and
succeeded to a degree. Now with a new stadium filled with revenue
opportunities, they have leaped away from us again. So we have to
be even more careful in deploying our resources."

Teixeira's agreement also comes just one day after the Yankees received a $26.9 million luxury tax bill for 2008 (their payroll for the season was a record $222.5 million, according to The Associated Press), when their streak of 13 consecutive playoff appearances ended. But with the revenue from their new stadium, where tickets are priced at up to $2,500 per game, their appetite for free agents wasn't diminished.

Just 28, Teixeira is the type of hitter the Yankees hope will revive an offense that dropped from a major league-leading 968 runs in 2007 to 789 last season. The switch-hitter batted a combined .308 with 33 homers and 121 RBIs for the Atlanta Braves and Los Angeles Angels, who acquired him July 29. He is also a two-time Gold Glove winner.

"You just want to wish the player well and you hope he made the right choice for him and his family," Reagins told AP. "At the end of the day, I think he wound up where he wanted to be."

The Yankees landed Teixeira at a time it was believed the Red Sox or the Nationals were the likeliest to be his future employer.

Boston executives met with Teixeira and his agent, Scott Boras, last week and were told they were being outbid. Teixeira, who is from Maryland, also had discussed signing with the Orioles.

"We would have loved to have had the player, who appealed to us because of the special circumstances of where he's from and where we are. We diverted from our plan to try to get him," Orioles president of baseball operations Andy MacPhail said. "But at the end of the day, it was just too much to pay for one player. It would handicap our ability to go forward."

The Nationals also held talks. General manager Jim Bowden said his team's owners "demonstrated their commitment to win, when they stepped up in negotiations ... at the highest level."

"We are disappointed we weren't able to sign him," Bowden wrote in an e-mail to the AP on Tuesday, "and will now turn our attention to several other opportunities to improve our major league club this offseason."

The Angels made an eight-year offer during the winter meetings but withdrew it last weekend.

Teixeira will replace a void in the Yankees' lineup created by the departures of Giambi and Abreu, who became free agents. His arrival also creates a logjam for New York, which acquired first baseman Nick Swisher last month in a trade with the Chicago White Sox.

Although Swisher also can play the outfield, the Yankees have a multitude of options there, including Johnny Damon, Hideki Matsui, Melky Cabrera, Brett Gardner and Xavier Nady. Matsui currently is likely to be the designated hitter much of the time.

The Yankees' offseason spending has proved they are recession-proof. Around the rest of baseball, the highest free-agent contract belongs to Chicago Cubs pitcher Ryan Dempster, who will receive $52 million over four seasons to remain at Wrigley Field.

Buster Olney is a senior writer for ESPN The Magazine. Information from The Associated Press was included in this report.